Tag Archives: Class and economics

The Future of the Working Class, Part II

Graduation season has drawn to a close, and given the economy, both high school and college graduates now face uncertain futures.  For generations, American parents expected their children to achieve greater economic and social status than they did.  Surveys show that few families believe that this is likely any more.  After decades of widespread belief in upward mobility, Americans no longer see a perpetually brighter future.

Our economic pessimism is well-earned, and that has significant implications for young adults from working-class and middle-income blue-collar families.   The old model of following a parent into the steel mill or auto plant has been a doubtful dream for a couple of decades now, and the current economic crisis makes it even less realistic.  As Bob Herbert pointed out in a recent op-ed, workers under 30 have been the hardest hit in this recession.  So what will become of the rising generation of working-class kids?  What does their future look like?

In Friday’s New York Times, Steven Greenhouse highlighted one option:  college.  Perhaps ironically, community college enrollments are swelling, much as they did during the 1970s, when the higher education system significantly expanded the community college option in part as a way of keeping young adults out of an overcrowded workforce for a few more years.  Of course, today most students remain in the workforce while going to school, often working 30 or more hours a week at low-wage jobs to scrape up enough for tuition.  While college increases an individual’s lifetime earning potential, it doesn’t in itself ensure a strong economic future.  Among other things, young people seeking educational escape routes too often choose for-profit schools that offer training for jobs that don’t exist.  Others take on debt that will undermine their economic stability for years after graduation.  Meanwhile, as I noted a few months ago, most of the fastest-growing occupations don’t require a college degree, and many recent college graduates are struggling to find work.

As Greenhouse notes, some recent high school graduates are choosing college because they don’t like the jobs that are available.  They simply don’t want to work for $7.50 an hour, and who can blame them?   And even those jobs are becoming more scarce.  That’s why many young adults are entering the informal economy, off-the-books jobs that include legal work that is not formally reported, such as mowing lawns or caring for children, as well as illegal work such as prostitution.  According to recent reports, the informal economy is growing as the formal economy shrinks.  Some off-the-books jobs might pay more than $7.50 an hour, but they also bring the potential for exploitation, poor working conditions, and intermittent employment.   Not exactly the foundation to build a comfortable life.

All of this occurs against a backdrop of what is likely to be a very slow economic recovery and at a time in their lives when young adults should be developing the work experience upon which to build a secure future.  As Louis Uchitelle reported last week, even in this bad economy, some employers are struggling to fill jobs, because they want experienced workers.  Tomorrow’s experienced workers can only come from the ranks of today’s beginners, but with so few good entry-level jobs open now, how will we develop the kind of workforce we will need in another decade?  As Uchitelle’s article suggests, college alone won’t do it.  Nor will low-wage jobs in the formal workforce or off-the-books work in the informal economy.

Securing the future for the working class, much less preserving the promise of upward mobility that has been so central to American culture, requires big thinking and integrated policy.  We must connect educational policies (and funding) with policies related to business, employment, wages, health care, and pensions.  We must begin to think about the long-term consequences of policies directed at solving current problems.  We must also demand that policy makers look beyond business and even beyond the middle class to consider the opportunities and conditions of the working class.

Sherry Linkon

New Survey Results: What the Working Class Thinks about Obama and the Economy

During the 2008 election and since the start of the economic crisis, I’ve spoken with dozens of journalists from around the world who all want to know one thing:  what do working-class people think?  It’s standard practice for journalists to ask experts to speak for the working class, and while years of studying working-class life and issues gives me a pretty clear perspective, at the Center for Working-Class Studies we also believe in going to the source.

That’s why we’ve started an online survey project aimed at finding out what people think about current issues facing the working class.  Our initial survey, focused on the economy, was distributed in April.  More than 900 people responded.

Results show strong support for President Obama, with approval ratings in the high 80s, despite pessimism about economy and uneasiness about the future.  Working-class respondents—defined as those between the ages of 30 and 60 with annual incomes of $10,000 to $50,000 who lack college degrees—gave the President an 87% approval rating, although a slightly smaller number, 46%, strongly approve of his performance. Seventy four percent of this group believes the country is moving in the right direction.

Those positive numbers contrast with the 94% of working-class respondents who said the economy is bad or very bad.  They are also pessimistic about the prospects for a speedy recovery. More than 78% said they believe the recession will last one year or more with more than 46% saying it will last for two years or longer. Only six percent say they see light at the end of the economic tunnel this year.

The dichotomy between respondents’ view of the President’s performance and their concerns about the economy is underscored by their uncertainty about whether the administration’s stimulus plan will be effective. While 42% said they are confident the stimulus proposals will work, 44% said they are only somewhat confident, and 14% said they are not confident at all. Working-class respondents were slightly more optimistic with 48% expressing confidence in the President’s plan, 38% saying they were somewhat confident, and 13% saying they were not

confident at all that the stimulus package would turn the economy around.

The contrast between people’s optimism about the president and their pessimism about the state of the economy and its future can be explained by a number of factors.  First, the President is clearly in a honeymoon period. The people who voted for him, and that includes 85% of the respondents who revealed their choice when asked, are confident he can lead the nation out of the economic morass he inherited.  To a lesser extent, they probably don’t want to admit that they may have made a mistake last November, so they are willing to give him the benefit of the doubt for the foreseeable future.

At the same time, no one can ignore the economy, and for the working class, the bankruptcy declarations of two major American automakers feels especially significant.  The value of existing homes continues to erode, jobs are hard to find, gas prices are rising, the stock market’s falling, and despite all the talk about stimulus the economy appears to be stuck in neutral at best.  So while people remain hopeful that the President’s plan will work, it’s not at all surprising that they’re also very worried about the future.

That uncertainty about the future is underscored by the survey data:  only 35% of all respondents believed their children’s standard of living would be somewhat or much better than theirs, while 41% believed it would be somewhat or much worse, and 24% believed it would be the same.   At the same time, the working class appears to be considerably more optimistic overall: 48% of working-class respondents believe their children will do better, 42% believe they will do worse and seven percent believe their children’s standard of living will be about the same as theirs.  I’m not sure how to explain that optimism, especially given the decline of the auto industry.

The CWCS survey also revealed that respondents approve of the President’s plans to bail out the troubled domestic automobile industry by a margin of 75% to 21%. This clearly demonstrates that the President’s supporters want the government to take the steps necessary

to help GM survive.  A number of Republicans and conservative pundits believe that GM may become President Obama’s Iraq.  They predict that Obama’s popularity will begin to slip when the American people grow weary of throwing money at a hopeless cause, just as President Bush was dragged down by the war.  But our survey shows that an overwhelming majority are willing to give him the time needed to save GM and the tens of thousands of jobs it provides in Ohio and across the country.

How long will that patience last?  Will the continuing recession and rising unemployment generate more activism and anger among the working class?  Stay tuned.

The CWCS will issue a second survey later this summer.   To participate, visit our website, or contact me to join the survey mailing list.

John Russo

Tax Not in Anger

I’m for increasing taxes on “the rich” for the same reason Willie Sutton robbed banks: “That’s where the money is.”

I do not resent people for being rich and have no desire to “punish them for being successful,” as conservatives charge.  Particularly if rich folks have done something worthwhile to earn their money, like inventing Google, I think they should have at least three really big homes, five cars, a yacht, lots of money for vacations, and access to a private jet so they don’t have to deal with the rest of us.

Furthermore, I don’t think it’s immediately clear that they are not paying their “fair share” of taxes now, as liberals charge.  After all, the top 1% pays nearly 40% of federal income taxes, and the top 5% (President Obama’s definition of the rich) pay more than 38% of all taxes – federal, state and local.  Those are pretty good shares for such a small group.  What would be a fair share for them?

Citizens for Tax Justice (CTJ) recently calculated that in 2008 the top 5% received about 36% of all income in the U.S. and paid 38% of all U.S. taxes.  So, if you get more than a third of all income, you should pay at least that much of the taxes, and the rich are currently doing that.  But our long-standing moral concept of fair taxation is that those who receive more should pay a higher share of their income because they can afford to.  The easiest way to see this is to use the conservatives’ concept of taxes as punishment.  Using CTJ’s numbers for 2008, ask yourself the following question:

Who is “punished” more by their total tax burden: the family who earns $66,000 and pays about $20,000 in taxes or the one who earns $1.4 million and pays some $400,000 in taxes?

The first family’s $66,000 is the average gross income of the fourth quintile of taxpayers – those from the 60th to 80th percentiles in the income scale, earning roughly from $60,000 to $90,000.  The second family’s $1.4 million is the average for the top 1%.  If you look at what is left after each family pays all their taxes, it’s clear that the $20,000 from the first family is a much heavier burden.  Depending on the size of the family and where they live, it could mean the difference between having what the Economic Policy Institute calls a “basic standard of living”and not.  On the other hand, we could double the amount of taxes on that top-1% family, and they would still have $600,000 — more than enough to live very handsomely regardless of where they live and the size of their family.  Even doubling their tax burden, they would still be punished less than the $66,000 family.

The idea of paying a higher share if you can afford it is the basic principle of progressive taxation.  And the shocking thing about the numbers above is that though the federal income tax is progressive, the other taxes we pay are not – the federal payroll tax, most state income taxes, all sales taxes, and even property taxes.  Thus, when CTJ calculated total tax burdens at all levels of government, that average “middle class” family at $66,000 paid nearly the same share of its income (30%) in taxes as the average millionaire family (30.9%)

People in the bottom quintile get even more punishment.  They had an average gross income of $12,000 in 2008, according to CTJ, and while these folks famously pay nothing in federal income taxes, they paid almost 7% of their meager incomes in payroll taxes and nearly 12% in state and local taxes.  Even though they pay a much lower share of their income in taxes (18.7%) than either the middle-class or the millionaire families, I’d argue that the $2,200 they did pay is dramatically more punishing than either the $20,000 or the $400,000 the other families paid.

What this means is that to adequately share tax punishments, we need to make the federal income tax much more steeply progressive than it is in order to offset the punishing effects of all the other flat-rate taxes everybody pays.

What’s more, if you want to do all the things in President Obama’s 10-year, after-the-recession-is-over budget (and I do), we’re going to need to raise taxes on somebody, and the President has pledged not to do that on anybody with less than $250,000 in income. Fortunately, the Institute for Policy Studies (IPS) in early April released a report that provides a menu of tax increases primarily on the top 5% that would produce more than “$450 billion in revenue from those with the greatest capacity to pay.”

The study, titled Reversing the Great Tax Shift: Seven Steps to Finance Our Economic Recovery Fairly, is a bit on the angry side about income inequality.  The authors are especially exercised about the top 1% increasing its share of total income (before taxes) from about 11% in 1986 to about 22% now.  That’s more than $1 trillion transferred from the rest of us to them every year. The IPS tax proposals are all economically sound ones that have been proposed before, but having them all in one place with the amount of revenues each can be expected to raise is highly convenient.  You may or may not share the authors’ moral outrage at “the Great Tax Shift” since 1980, but they clearly show where the money is and how to get it.  Willie Sutton would have appreciated that practical approach.

Jack Metzgar

Who Really Runs the Place

Memories may be fading, but I’m sure most of you have some vague recollection of last year’s presidential election.

Come on, you remember.  Lots of bad TV commercials.  Debates that weren’t.  New and vibrant versus old and tired.  America turned blue.  The first African-American president.  Attractive wife.  Cute kids. Election night speech in front of Greek columns.  Hope.  The “dream” come true.

Hell, there was even a parade in January.

Yeah, that election.

I’m willing to wager that like me, most of you voted for Barack Obama.  We did so because we craved change; a shift of power from the war mongering, detainee torturing, job exporting, business-butt-kissing Republicans to a champion of the working class.

I’ll also wager you thought that’s what we got when Barack Obama raised his right hand and took the oath of office.  That’s why we shared a sense of excitement and exhilaration.  Things would be different now that Washington was controlled by a young, strong progressive president with a mandate in his pocket and a Democratic Congress at his beck and call.

Health care reform.  A solution to the foreclosure crisis.  Assualt weapons banned.  Cheaper student loans.  It was all coming and coming rapidly.

Uh, not so fast.

As recent events—or lack thereof—have demonstrated, you can elect all the new presidents you want, but that doesn’t mean things are going to change.  Because, it seems the people — that’s you and me — don’t run Washington. All those government buildings?  Not ours.  The millions of federal employees whose salaries we pay?  They don’t work for us.

How do I know?  Dick Durbin said so yesterday on the floor of the Senate.  Venting his frustration when 11 Democrats joined Republicans to kill legislation giving federal bankruptcy judges the power to renegotiate the terms of predatory mortgages and thus help middle-class families keep their homes, the Illinois senator did something strange and wondrous: he told the unvarnished truth:

“And the banks — hard to believe in a time when we’re facing a banking crisis that many of the banks created — are still the most powerful lobby on Capitol Hill. And they frankly own the place.”

They own it.  They do.  Need more proof?  OK, let’s talk about Sallie Mae, the quasi-federal agency that guarantees student loans made by private banks.  That Obama guy, the one we elected, he wants to do away with Sallie Mae because doing so will free up $94 billion that can then be given directly to students in the form of Pell Grants.

Great idea.  Who could possibly oppose it?  One guess.  Did you say banks?  You win.  And who did the banks hire to lobby on their behalf?  Tony Podesta, a major Democratic fundraiser whose brother John served as Bill Clinton’s last chief of staff and head of the Obama transition team.

According the New York Times, Mr. Podesta already has plenty of Democratic allies in Congress, including legislators who represent districts where Sallie Mae has offices.  As a result a simple, smart idea — giving student loan money directly to needy students instead of filtering it through banks that make billions for pushing paper around — may be dead.

It turns out, however, that the banks aren’t the sole owners of the house of government.  I guess it’s kind of a time share thing.  One of the co-owners, and I’m sure this won’t come as a huge shock, is the health insurance industry.  Access to high quality, affordable health care was one of the primary issues in last year’s campaign.  John McCain had a goofy scheme that would have taxed employee benefits and protected the huge profits of insurers.  Barack Obama didn’t really have a plan, but we trusted that when push came to shove he’d back real reform that would hold down costs and provide coverage for the more than 45 million Americans who don’t have it.

One way to do that, and one concept he did embrace, was the formation of a government operated health care plan that would compete with the for-profit insurance industry.  While not quite the single payer system progressives yearn for, it was a start.

So, when the president convened a health care summit to tackle the issue who dominated the conversation?  Karen Ignani, the front person for the AFL-CIO during the 1993 health care reform effort—until she turned traitor and went to work for America’s Health Insurance Plans, the trade group that represents the nation’s for profit health insurance companies.

It appears that AHIP isn’t thrilled about the prospect of competing with the government.  Not good for insurers’ bottom lines, you see.  So they proposed other ways of reducing costs that experts, including the Congressional Budget Office, have repeatedly said won’t work.  That doesn’t matter to Ms. Ignani and the companies she shills for.  They, and other groups that sell insurance including AARP, aren’t interested in reform, they’re only interested in running out the clock, just as they did in 1993.

Did our champion, our working-class hero, stand up, smite Ms. Ignani, and tell her that universal coverage, not preserving insurance industry profits, was the goal of his administration?  Well, no.  And he wouldn’t let anyone else do it, either.  Congressman John Conyers and Dr. Oliver Fein, two long-time advocates of the single payer solution who were reluctantly admitted to the meeting after first being denied invitations, were expressly forbidden to speak.

The President has been similarly unwilling to tangle with another group of longtime Washington squires: the NRA.  Despite the fact that once-banned assault weapons were recently used to kill four cops in San Francisco, three in Pittsburgh, and are the weapons of choice of both domestic psychopaths and Mexican drug lords, the administration has signaled that it’s not willing to throw its weight behind an effort to once again prohibit guns that have only one purpose: killing human beings as quickly and efficiently as possible.

While some progressives are growing restive with Mr. Obama’s timidity, I’m willing to give him a break.  After all, he just moved in and wants to show he’ll be a good tenant.  And he’s busy doing other things, like fixing the economy by doling out hundreds of billions to the bankers who screwed it up in the first place.  But sooner or later he’s going to realize that while bankers, insurers, big oil, gun nuts, and the pharmaceutical industry may own the building, working families issued his four year lease.  If he wants an extension in 2012 he’ll need to invite us over for a chat—no matter how uncomfortable it makes the landlords.

Leo Jennings

The Real Future of the Working Class

As the economic crisis deals another blow to American manufacturing, I’ve been wondering about something my brother-in-law asked me last fall:  the good working-class jobs seem to be disappearing, so what will become of the working class?

It’s a good question, and the answer is pretty discouraging.   Between the mid-1940s and the early 1970s, strong contracts negotiated by industrial unions, national policies such as the GI Bill and National Highway Act, and several decades of growth by American industries created what many thought would be the permanent reality: working-class jobs that could fund middle-class lives.  Three decades later, some still equate the “working class” with blue-collar industrial workers, and we still believe that working people deserve a chance to achieve the American dream.  Even as unions have accepted reduced wages and benefits and retirees have struggled to survive when the promises of earlier contracts are abandoned, we still see manufacturing jobs as good jobs.  Globalization and technology have allowed manufacturers to make more – products and money — with fewer workers, or at least with fewer workers here.  But even as reality shifts, we can’t let go of the ideal of the good manufacturing job.

All of that is coming to an end, leaving the working class with two options.  The one we hear about most is education.  That college is the path out of the working class has become received wisdom.  And yes, many of the occupations that are projected to grow over the next two decades require college degrees.   While attending college can mean piling up debt and offers no guarantees, education will help some working-class people find their way to new middle-class jobs.

But college isn’t an option for everyone, and about two-thirds of jobs do not require a college degree.  Indeed, some of the fastest-growing occupations require little training.  Manicurists, skin care specialists, fitness instructors, and preschool teachers need only a certificate or license.  Other growing fields require even less.  On-the-job training is all that’s necessary for security personnel at casinos, janitors, or home health and personal aides.

At first glance, then, it would seem that today’s displaced workers have reason to be hopeful for the future.  23 of the 30 jobs projected to produce the largest job growth over the next decade don’t require a college degree, and many don’t even require special training.  Who needs factories?  Beauty salons, medical offices, and casinos will provide the working-class jobs of the future.

But there’s a catch.  The pay is lousy.  The average annual salary for a beginning steelworker (assuming that such a position exists) is $35,590.  After five years, that steelworker would bring in over $50,000.  The starting salary for a manicurist is $21,280, and it tops out at about $32,000.  For home health and personal aides, the #2 and #3 fastest growing jobs, the salary hovers around $20,000 a year.

It’s not news that the American economy is shifting away from manufacturing and towards service.  Nor would anyone be surprised to hear that while service jobs are sometimes safer, cleaner, and less physically-taxing than working in a steel mill, they don’t pay as well.  But let’s think about what this means for the future of the working class and the future of America.

If nothing else, this will clear up all that confusion about who is working class.   As the majority of working-class jobs become low-wage jobs, we won’t have to worry about how to determine the social class of a high-school graduate working on an assembly line but earning over $50,000 a year.  Income, education, and social position will line up neatly, as they did before the 1940s.

But it also means saying goodbye to the American dream.  Home ownership and saving for a child’s college education are beyond reach if your salary hovers around the Federal poverty rate of about $22,000 for a family of four.  True, some families have multiple wage earners, and many working-class families will be able to earn about $45,000 annually – a good $15,000 below the suggested national livable wage.  And many households struggle to survive on one low income.  As the working-class moves into these low-income jobs, the ranks of the working poor will grow, and the proportion of the working class who are comfortable and financially secure will shrink.

Some will suggest that the working class deserves its economic difficulties.  Want a decent life?  Go to college.  Too “lazy” or can’t afford to go to college?  Tough.  So much for the idea of valuing hard work, much less our moral and social obligation to ensure that anyone working full-time deserves a living wage.

Yet having a large proportion of the population living on the economic edge increases demand for governmental and charitable support, creates a cycle of poverty that’s difficult to escape, and undermines the broader social fabric of American society.

I don’t have a solution beyond the obvious: raise wages.  The only way to get there is to recognize the emerging reality: even if many more people attend college, we will still have a large and growing, hard-working, low-paid working class.  All the discussion about education as the key to stabilizing the economy ignores the real future of the working class.

Sherry Linkon

The “Bigs” vs. the Working Class

It’s no surprise that we spend a lot of time on this site discussing the working class. After all, it is named Working Class Perspectives.

We’re not alone.  Over the eighteen month run up to the general election pundits, professors, poets, and political hacks were consumed with thoughts about the tens of millions of people who, by one definition or another, qualify as working class.

It now appears, however, that far too much time has been devoted to the working class-especially by President Obama.  At least that’s the opinion of Newsweek‘s Howard Fineman, who writes in the March 10 edition of Newsweek that the country’s “Establishment” comprised of Beltway insiders, the chattering class including the Manhattan-based media, and Wall Street are  “taking his measure and, with surprising swiftness, they are finding him lacking.”

According to Mr. Fineman, although the President still has the approval of the people [his approval rating has averaged between 65 and 60.8 percent since the inauguration], the Establishment is beginning to mumble that the president may not have what it takes.  He provides a litany of issues that are making the “Bigs,” as he calls them, restive:

  • The failure to call for genuine sacrifice on the part of all Americans, despite the rhetorical claim that everyone would have to “give up” something.
  • A 2010 budget that tries to do far too much, with way too rosy predictions on future revenues and growth of the economy.
  • Obama is no socialist, but critics argue that now is not the time for costly, upfront spending on social engineering in health care, energy or education.

He then concludes “Other than all that, in the eyes of the big shots, he is doing fine. The American people remain on his side, but he has to be careful that the gathering judgment of the Bigs doesn’t trickle down to the rest of us.”

Mr. Fineman is dead wrong.  The fact is, the “Bigs” are the last people Mr. Obama has to worry about for a number of reasons.  First, because they didn’t vote for him.  Second, because they never will.  And third, because his presidency will be doomed if he focuses on mollifying the elites rather than on meeting the needs of the millions of working families those very elites have dragged to the edge of the economic abyss.

It’s apparent that Mr. Obama grasps this point.  He clearly understands that after being ignored by pundits and politicians and suffering abuse at the hands of Wall Street for the last two decades, the working class has more than earned the proverbial fifteen minutes of fame that’s come their way.  After years of wage stagnation, job loss, and the resultant evaporation of the American Dream, the nation’s working families not only need, they undeniably deserve the government’s full attention.

That’s exactly what they’ve been getting from the new chief executive.  Nearly every domestic policy or program emanating from the White House is discussed in the context of its probable effect on workers and the middle class.   And while economists like Paul Krugman and others have raised legitimate questions about how effective the administration’s approach to the crisis may ultimately be, no one has questioned the new president’s concern for or commitment to the millions of men and women who placed their trust in him on November 4.

That commitment is obviously at the heart of the Mr. Obama’s adherence to the bold agenda he has established for his presidency, despite warnings from the all-knowing Establishment that his plans are overly ambitious given the state of the economy.  Far from retracting or retrenching, he continues to move forward with plans to provide tax cuts for the working class, reform health care, increase access to education, and invest in a real energy policy that will create jobs and reduce our reliance on foreign oil.

Just as importantly, he appears to be unmoved by warnings from the “Bigs” that allowing the Bush tax cuts to sunset in order generate the revenue to pay for his programs will stifle growth and job creation.  He recognizes that working families, beset by falling wages and deteriorating home values have sacrificed enough and that efforts to revive the economy will only succeed if sufficient stimulus is directed toward those who need it most.

Contrary to Mr. Fineman’s contention, what Mr. Obama should fear most about the Establishment in not that their discontent will trickle down to the “little people” who live outside the Beltway and Manhattan, but that the “Bigs” will succeed in derailing his effort to remake and reorder America and in so doing cause him to break faith with the people who elected him.  It is then, and only then that his presidency, his legacy, and our country will be in jeopardy.

Leo Jennings

A Lesson in Politics and Power

Unless you’ve been too busy looking for a job to notice, things are kind of upside down in Washington. President Obama and the Senate Democrats, who kicked the GOP’s posterior last November are skulking around like losers, cutting billions from an already inadequate stimulus package in the hope of securing Republican votes they don’t need.

The Republicans, who should be wearing sack cloth and ashes, have, under the guidance of the party’s de-facto leader, the great prevaricator Rush Limbaugh, seized control of the stimulus agenda and are eroding the public’s support for the president they loved just moments ago.

In order to restore the balance of the universe, I’d like to get everyone together in a huge classroom-the President, Democrats, Republicans, the media, and the public-and give them a reality check in the form of a vocabulary lesson.

Here’s how it might go:

Good morning, class. May I have your attention please?

Class?

Claaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaas!  Tom Daschle and all you autoworkers, please stop scanning the help wanted section for a moment and pay attention..

Thank you.

We are going to begin with a vocabulary lesson.  While these words are not directly related to economics, they are definitely related to the fate of President Obama’s economic stimulus package, so we must become familiar with their true meaning.

The first word is “bipartisan.”  Repeat after me: “bipartisan.”  It means “Of, consisting of, or supported by members of two parties, especially two major political parties.”

Now I will use the word in a sentence.  “President Obama was foolish enough to believe that the Republicans would put the future of the country first and engage in truly bipartisan talks to develop a stimulus package that would help the working class.”

Our next word is “consensus.”  Repeat after me: “consensus.”  It means “general agreement or concord; harmony.”

Here’s a sentence using the word consensus: “It is impossible to reach consensus with a group of disgruntled ideologues who, in their heart of hearts, want you to fall flat on your liberal-commie face.”

Our next word is “mandate.”  Say it with me, “mandate.”  No, little Sean Hannity, it does not mean a bunch of guys going to Hooters to watch extreme fighting and pound down shooters and beers.  And please, when I want to hear from you I’ll call on you.

Now, let’s get back on task.  Mandate means “a command or authorization to act in a particular way on a public issue given by the electorate to its representative.”

Here it is in a sentence: “Americans, including the millions of working-class voters who put their faith and trust in him, did not give Barrack Obama a mandate so he could roll over for a bunch of moronic Republicans.  They gave him a mandate so he could roll over them and their failed policies.”

Our last word is “leadership.”  Repeat it, “leadership” — “the quality of mind or spirit that enables one to face danger, fear, or vicissitudes with self-possession, confidence, and resolution; bravery.”

I’ve come up with this sentence using the word leadership: “If President Obama had demonstrated the lack of leadership that’s been on display since he took office when he was candidate Obama, we’d all be talking about President Hillary Clinton’s stimulus plan.”

That’s it, but there will  be a quiz in 2010 and a final exam in 2012.

Like many others in the Democratic wing of the Democratic Party, I take no pleasure in acknowledging that the President and his team are losing the battle for the hearts and minds of the American people when it comes to revitalizing the economy.  Especially since they’re losing it to a corps of cynics led by Limbaugh who, when asked by Hannity if he wanted Obama to succeed said:

“No! I want him to fail.” If his agenda is a far-left collectivism — some people say socialism — as a conservative heartfelt, deeply, why would I want socialism to succeed?

And yet, knowing that the people with whom he is negotiating want him to go down in flames, the President and his allies are still chopping billions from a stimulus package that economic experts including Nobel Prize winner Paul Krugman say is already too small to accomplish the goal of creating good-paying jobs for millions of working-class Americans.

Why?  Because the President and Democratic leaders have decided that it’s more important to get Republican senators Olympia Snowe and Susan Collins to vote for a watered down package then it is to battle the GOP, exercise the mandate they’ve been given, and pass a package that will spur a recovery.

What should the President do?  As Krugman and others suggest, he should beef up infrastructure spending by about $200 billion, initiate health care reform, tell Americans why his plan is in their best interest, and, like the voters, tell the Republicans to go to hell.

Better yet, he should grab one of the 100 cigarettes John Boehner smokes every day out of his mouth and grind it out on his forehead. Then he should walk over to the Senate and poke career obstructionist Mitch McConnell in the eyes-the way Moe from the Three Stooges used to do when he was mad at Curly.

Then he should pass the stimulus package we need and have the courage to say: “I’ve just done the right thing and I am willing to be judged for it.”

He must do this now because, as Ron Todd, the late leader of the British equivalent of the UAW once said, “You don’t have power if you surrender all your principles-you have office.”  After eight years of abuse and neglect at the hands of a president who couldn’t spell “principle” the last thing we need at this difficult time in our history is a man who can do little more than sit in the Oval Office.  Clearly this is not the time for our President to run up the white flag.  It is time for him to fight.

Leo Jennings

The De Facto Unemployment Rate: 25.12%.

Ever since the early 1980s, residents of the Youngstown area have always been skeptical of government’s official unemployment rate. In 1982, the official unemployment rate hit 24.9% but declined to around 12% in early 1984. The Ohio governor and city officials praised the dramatic decline, but local residents knew that rate failed to account for workers who had given up looking for work, were working part-time, or had been forced into early retirement. In a report commission by the State of Ohio, the YSU Urban Studies program found that “real” unemployment rate was over 18 percent or about 1.5 times higher than the official rate.

Given the “shock” over the most recent unemployment numbers, it is worthwhile to take another look at the figures in light of Youngstown’s experience. But first we need some definitions of various categories of unemployed people, based on the Bureau of Labor Statistics and a comparative study done by the Center for Economic and Policy Research.  Attention class!

Officially unemployed- Persons who worked less than one hour during the nationally determined reference period (one week), looked for work during this period, and were available for work during this period.

Marginally attached workers – Persons not in the labor force who want and are available for work and who have looked for a job sometime in prior 12 months (or since the end of their last job if they held one within the past 12 months), but were not counted as unemployed because they had not searched for work in the four weeks preceding the survey.

Discouraged workers – Persons not is labor force who are available for a job and who have looked for work sometime in the past 12 months (or since the end of their last job if they held one within the past 12 months)

Underemployed -Persons who would like to work full time but are not able to do so for economic reasons such as unavailability of full-time work or reduced demand for hours by current employer

Excess disability – Persons who are excluded from labor force because of sick leave or early retirement

Government programs – Persons receiving government subsidized or government provided programs. For example, low wage workers receiving Earned Income Tax Credits

Prison and jail populations – Persons not in labor force because of incarceration.

Now using these definitions and information for the current employment reports, we can begin to make estimates of the “de-facto” unemployment rate.

The official unemployment rate in December was 7.2%, an increase of .4% from the preceding month and a 2.4% increase since the National Bureau of Economic Research officially designated start of the recession in December of 2007. (These academic economists could not decide that we were in a recession until last month). To this we can add individuals who are marginally attached to the workforce (1.2%), discouraged (.4%), or who are underemployed (5.2%). The latter figure is of particular concern as some companies reduce workers’ hours in order to avoid layoffs. This was borne out in the current employment report where the average hours worked declined to 33.3 hours.  The next step for struggling employers will be layoffs. Anyway, if you’re keeping track, our de-facto unemployment rate is up to 14%.

From here it gets statistically more difficult. But using the approach taken in the Center for Economic and Policy Research study, we can estimate that 6% of the potential labor force consists of people who have been forced to retire or are on sick leave, and those whose work is being subsidized by the Federal Government is at 4%. Both of these are conservative figures given the high levels of plant and office closings and buyouts in the past year.  Together, they add another 10% to the de-facto unemployment rate

Finally, prison reform advocates have long suggested that incarceration levels are a direct response to economic conditions. This is especially important in a country that has such high rates of incarceration; according to a 2003 British study, the US has the highest incarceration rate in the world.  If we count incarcerated people among the unemployed, that adds another 1.48% to our de-facto unemployment rate for a total of 25.12%

12/08
Unemployed 11,1087.2%
MarginallyAttached 1.908(1.2%)
Discouraged 642(.04%)
Underemployed 8038(5.2%)
Excess disability* Est.(6.0%)
Government Programs* Est.(4.0%)
Subtotal 23.64%
Prison Population 2.300(1.48%)
Total 25.12%

So what does all this mean? It is what “Main Street” not “Wall Street” has been saying for a long time. The economy is bad, real bad, and it’s getting worse for working families. It is particularly difficult for those who have given up looking for work because they have been left behind by economic change and technology, working-class people whose only hope for the future is in jobs with short job ladders and poor pay. Not only have they been forgotten, but they have erased from official unemployment reports.

To make matters worse, over the last 20 years, business and economic reporters and/or commentators have been, at best, Pollyannaish and at worse flaks and con men when comes about talking about the real situation for working- and middle-class Americans. The media has only recently begun to reassess the economic situation as journalists and pundits have tried to make sense of the mortgage crisis, financial failures and scandals, widespread layoffs and the growing economic crisis.

We count on policy makers and the press to provide accurate information to help us understand and address the economic crisis.  The more we know, the better prepared we can be, as individuals and as a society, to respond effectively.  This is especially true in light of the recent debate over whether we are in a recession (mild or severe) or on the brink of regional and/or a national economic depression.

Youngstown’s unemployment rate still among the highest in the nation after 25 years, and now the whole country has begun to know what Youngstown has known for a long time.

John Russo

A Stimulus Package for the Working Class

It’s no secret that President-elect Obama and his economic team are assembling the components of the much-needed economic stimulus package they will propose in late January.  It’s also no secret that the proposal will include hundreds of billions of dollars in road, bridge, sewer, and other public works projects that will create tens of thousands of good paying jobs for working-class families across the United States.

Those who understand Mr. Obama’s objectives are applauding the plan.  Mayors and governors like the fact that the package will accelerate the daunting and brutally expensive task of replacing and upgrading the nation’s crumbling infrastructure, including sewer systems that are more than 100 years old. And they like the fact that the workers rebuilding those aging sewers will be paying state and local taxes.

Advocates for the working class are encouraged because the plan will create jobs that can’t be shipped overseas.  Fact is, a sewer system can’t be built in the Maquiladora region of Mexico, hinterlands of China, or back alleys of Bombay, jammed  in a container, and shipped to Ohio.  In order to replace sewers in Youngstown or Cleveland, local workers have to dig holes, rip out old pipes, drop in new ones, and then bury them.  We’ll all get to see the work being done.  Many of us will live next door to the people doing it.

Not surprisingly, organized labor, particularly the building trades unions, are enthralled with Obama’s package because many of the jobs created will be subject to the provisions of the Davis Bacon Act (DBA), the nation’s prevailing wage law.  As a result workers will earn middle-class wages and receive health care and pension benefits, an army of idle apprentices will be able to find work, and thousands of men and women will have the opportunity to enter apprenticeship programs that will make them employable for the rest of their lives.

What may be surprising, however, is that the U.S. Chamber of Commerce, the Associated Builders and Contractors (ABC) the trade association for non-union contractors, and other anti-labor groups are also licking their chops over this component of the Obama plan.  Not because they suddenly love unions or the concept of prevailing wage, but because in their twisted little minds they believe the Congressional wrangling over hundreds of billions of dollars in infrastructure spending will give them yet another crack at repealing Davis Bacon.

For years the Chamber and ABC have been arguing that DBA creates waste, costs jobs, and hinders the free market.  In its position paper on the topic the U.S. Chamber claims that:


Repeal of the Davis-Bacon Act will spur local economic growth by making it easier for state and local governments to fund federally subsidized projects such as school construction and improvements to the transportation infrastructure.
Davis-Bacon repeal also would create an estimated 31,000 new construction jobs…

ABC echoes the Chamber’s rhetoric in its press releases and position papers:

[Davis Bacon's] time has run out. In the 21st Century, especially in today’s competitive global economy, it is essential to allow the free market system to determine wages.

Today, this law represents nothing more than an American welfare program that subsidizes unionized companies.

Fortunately, responsible elected officials have turned a deaf ear to these specious arguments. Citing a long series of academic and government studies, including one issued earlier this year by the Economic Policy Institute that provides clear and convincing evidence of the benefits of DBA, they have derailed every attempt to repeal the statute whether in the form of legislation or President Bush’s callous Executive Order that exempted areas of the Southeast ravaged by Hurricane Katrina from the law.

Today, undeterred by past failures, the Chamber and ABC are undoubtedly girding themselves to resurrect their crusade against Davis Bacon.  They will contend that Americans will get far more bang for their stimulus bucks if new projects are exempt from prevailing wage.  They will argue rolling back the law together with increasing infrastructure spending by 10 or 15 times will add hundreds of thousands of Americans to the workforce-if only the corrupt unions and their greedy members get out of the way.

Some leaders in the trades don’t believe business and their Republican allies in Congress will launch an anti-Davis Bacon campaign in connection with the stimulus package.  After all, they wouldn’t want to be seen as blocking a measure that will pour billions into the economy at a critical time, would they?

Of course they would.  If they’re greedy enough to use a natural disaster like Hurricane Katrina as an excuse to attack workers, they certainly won’t hesitate to use something as mundane as an economic crisis to do the same thing.

In fact, it’s already happened.  Just review the deliberations surrounding the proposed bailout of the Big Three.  The focus of the discussion quickly turned from the failures of management to a vitriolic pillorying of “greedy” workers and their irresponsible union.  And it ended with demands that the UAW and its members take concessions or else.

Fortunately, the trades and their members are in a much stronger position.  They’re not begging for help. But they must be prepared to fight to preserve a law that has produced huge benefits for their members and for the taxpayers.  They should demonstrate that prevailing wage will ensure that the stimulus package puts money in the pockets of the working-class families who need it most and will spend it quickly on food, clothing, housing, cars, college, and yes, the state and local taxes that fund essential public services.

They must also make the case that repealing Davis Bacon will be good for only one group: the non-union contractors who will maximize profits by driving down wages in the trades, doing shoddy work, and refusing to fund job training and apprenticeship programs.

In short, it comes down to this: should the stimulus package be a long-term investment in America’s working class or a boon to corporations and their profits?  The answer is obvious-but only if someone is willing to stand up and make the argument.  Here’s hoping the trades and their allies are up for the job.

Leo Jennings

Move That Bus!

One of the things that attracted me to the Center for Working-Class Studies at Youngstown State University is its focus on “bread and butter” issues. As a new faculty affiliate of the center, I now help spotlight and evaluate some of these issues. Take the issue of getting to and from work, for example. What could be more universally “bread and butter” than helping people to get to and from work so that they might be self-reliant, productive members of their household, community, city, state, and nation? I believe that few of us would want to undermine such core American values as a strong work ethic, self-reliance, productivity, ingenuity, and self-respect. But I fear that these values will be undermined if we fail, as a nation, to support improvements in public transportation, and those who depend most upon it to get to and from work, school, and other places.

Cities across the nation are grappling with rising oil prices, record-high inflation, staggering home foreclosure rates, and declining revenue for public services, such as local and regional bus transportation. This includes the city of Youngstown, Ohio. In November, the Western Reserve Transit Authority will ask people in Youngstown and surrounding communities to approve a 0.25 percent county sales tax that would help finance restoration and improvement in the region’s bus service. This is the second time that this proposal has been presented for voter approval. Fifty-six percent of area voters rejected the proposal in March 2008.

Here are a few research findings that people in Youngstown and surrounding communities (and people in your town) might consider before casting a vote on public transportation funding:

  • About two-thirds of all public transportation passengers take public transportation to get to and from work or school, according to the Federal Transit Authority.
  • Low-income women are more likely than are low-income men to require public transportation. And among women, Latina and low-income African American women are highly dependent on public transportation. Research suggests that, without access to public transportation, low-income African American women would have few, if any, means of getting to and fromjobs in retailing, personal services, and childcare, where many are employed. Walking to work is less of an option for the women because of the shortage of jobs in low-income, African American urban communities.

Recent poll results suggest that the current economic recession has begun to solidify public resistance against higher taxes for any purpose. (As an example, see the on-line comments from a July 2008 poll of Ohioans regarding higher taxes for improvements in bus service in Youngstown, Warren, and Columbiana, Ohio.) This “anti-tax sentiment” is making it difficult to mobilize massive public support for tax levies that would support improvements in public transportation in San Diego, Chicago, Youngstown, New York, and other places.

Do improvements in public transportation benefit even those who can afford their own vehicles and who, as a result, do not use public transportation? Should the issue of funding public transportation improvements matter even to those who, on the surface, appear not to be affected by the condition of public transportation in America (such as some upper-middle income suburban residents who commute in private vehicles)? Mounting evidence in scholarly journals, trade magazines, and the popular press suggest that the answer to these questions is “yes.”

Research finds that communities that invest in public transportation realize enhanced social economic development and prosperity. For example, a study by the American Public Transportation Association estimates that for every $1.00 invested in public transportation, there is a $3.00 increase in business sales. Communities that invest in public transportation are reported to attract more businesses, more visitors, and more shoppers. Property values tend to be higher in communities with good public transportation systems.

Absenteeism in the workplace and at school decreases when people who cannot afford private vehicles have reliable public transportation to get them to and from work and school. This decrease in absenteeism translates into higher productivity within the workplace, which potentially benefits everyone in a community, city, and region.

More business sales, more businesses, more visitors, more shoppers, higher property values, and increased productivity. Each of these benefits is an additional compelling reason for all to be concerned about the condition of public transportation in America, in my view. I submit that an investment in public transportation is an investment in a more promising future for people across the social-class spectrum, and particularly for members of the working class and the poor.

Denise Narcisse